China Signals Support for Its Billionaire Art Buyers

This story about the Chinese art market, with its emphasis on China’s billionaires lost net worth and their abiding appetite for Western art, may be more significant for where it runs than what it says. The story was published by the the government’s China Daily. It seems to signal support for, and pride in, Mainland Chinese buyers making a splash at auction. The story goes into great detail on the losses sustained by top collectors but also how much wealth they retain. Then it closes by quoting New York collector Larry Warsh:

“The financial crisis in general works both ways. It’s not China specific. If you look at Dow drops in the last 10 or 15 years, the art market booms when the stock market is down. It creates a sense of insecurity and it creates a safe haven for commodities like gold and art. It also makes people need to sell quicker. Art is a great way to hold on to assets.”

He rejects the idea that the country’s financial problems will cause the Chinese to flee the art market and cause it to crash just as the Japanese one did more than 25 years ago, when Japanese collectors smashed records at auctions and then exited the art market when their economy imploded. The art market is bigger than it was in 1990, he argues, and there is more money in a greater number of regions.

“Japan doesn’t have the scale of the Chinese art market, but there was a lot of bad buying in the 1980s. Wealth will support the Chinese art market, and there is enough wealth to support the art available. There is trophy buying in China but that doesn’t mean it’s not good buying or good collecting.”